Rivian Automotive has reached a $250m agreement to settle a securities class action that was filed in 2022.
The litigation, filed in the United States District Court for the Central District of California, alleged that Rivian’s initial public offering (IPO) disclosures and certain post‑IPO statements made during an earnings call and in a Securities and Exchange Commission (SEC) filing on 17 December 2021 were materially false or misleading.
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The company announced its intention to go public in 2021.
Plaintiffs claimed the company failed to disclose material risks and facts, including that the bill of materials costs for the R1S and R1T models substantially exceeded the sales prices at which those vehicles were being offered, prompting Rivian to raise R1 retail prices.
Rivian has rejected the claims and stated that the settlement does not constitute an admission of fault or wrongdoing.
“The company denies the allegations in the suit and maintains that this agreement to settle is not an admission of fault or wrongdoing. However, settling will enable Rivian to focus its resources on the launch of its mass market R2 vehicle in the first half of 2026,” its statement read.
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By GlobalDataUnder the proposed settlement, subject to court approval, Rivian will pay $250m to resolve claims brought on behalf of purchasers of the company’s class A common stock between 10 November 2021 and 10 March 2022.
The payment will be funded by $67m from directors’ and officers’ liability insurance and $183m from the company’s cash on hand.
If approved by the court, the settlement would resolve all claims against Rivian and the other named defendants in the action.
Rivian develops and manufactures electric vehicles (EV) and provides associated software and services.
The company builds its vehicles in the US and distributes them directly to consumer and commercial customers.
